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Home > Judgments > 2007 archive

H v H [2007] EWHC 459 (Fam)

Judgment in big money case involving the division of substantial property built up over the course of a long marriage and the husband's future earnings.

A key question addressed by Charles J was how to account for the husband's future income, including recent substantial bonuses arising from his work as a banker. Reviewing the principles set out in White and Miller & McFarlane, he concludes that the matrimonial property should be set assessed at the date when the "mutual support" of a marriage is at an end but that the wife should be awarded an additional amount from earnings after that date to ease her transition to independent living.

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Neutral Citation Number: [2007] EWHC 459 (Fam)

Case No: FD 05D 02849
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

04 April 2007

Before :

THE HONOURABLE MR JUSTICE CHARLES
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Between :

H (Applicant)

- and -

H (Respondent)

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Nicholas Mostyn QC and Richard Todd (instructed by Farrer & Co) for the Applicant
Lewis Marks QC and Christopher Pocock (instructed by Hughes Fowler Carruthers) for the Respondent

Hearing dates: 29 and 30 January 2007
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Judgment Approved by the court


Charles J :
Introduction

1. This is an application for ancillary relief under the Matrimonial Causes Act 1973 (the MCA), and a "big money case", relating to (a) substantial wealth built up during the course of a long marriage as a result of the earnings of the husband as a banker and the chosen lifestyle of the parties, and (b) the husband's future earnings.

2. The parties have four children. Their choice as a married couple was that the husband focused on his career and the wife travelled with him as his work dictated and devoted herself to supporting him, their home and bringing up their four children. Their chosen lifestyle during the marriage was therefore one in which the husband and wife by a combination of amongst other things their respective talents, their respective choices, their hard work, their support for each other and good fortune created a family that comprised themselves and four healthy and talented children, which enjoyed an increasingly good standard of living and, certainly during the later years, substantial wealth.

3. This is not a case in which the wife gave up a career that was likely to provide substantial income or monetary reward. She was a teacher. No doubt if she had pursued that career it would have provided other and additional benefits and burdens to those she took on as a wife and mother, but it was common ground that the choices made by both the husband and the wife were ones they both made willingly. Until the onset of the breakdown of their marriage those choices were ones that led to a successful emotional and economic result.

4. In determining what is a fair distribution of financial resources following the breakdown of a marriage there is to be no gender discrimination. The chosen roles of the parties to a marriage inevitably give rise to both benefits and burdens. I remind myself of these points at this early stage of this judgment because, perhaps understandably, both sides in submission tended to stress the burdens of their respective roles and choices rather than the benefits they enjoyed as a result of them. The reality is that both of their roles have benefits and burdens and they both provide direct and indirect support to the other which enhance aspects of the family life that they both enjoyed.

5. Some of the benefits of the husband's individual role can be easily measured in money terms. Some, however, such as job satisfaction cannot. His burdens include long hours, travel and hard work. The wife's role as the home maker and the primary caretaker of the children enabled the husband to devote time to his work which gave them both considerable economic benefits. Other benefits of her role are intangible. The bringing up of four children and the creation of a lovely home as the wife has done involves much hard work, love, time and devotion but it results in numerous joys and much satisfaction and pleasure.

6. In this case it is clear that neither party regretted the role that they respectively played. On the contrary during the successful years of the marriage it seems to me that they were both justifiably content with the roles they had chosen. As Baroness Hale points out in paragraph 154 of her speech in Miller v Miller; McFarlane v McFarlane [2006] 2 AC 618 (Miller & McFarlane) the fact that they both might have wanted to take the roles they did is neither her nor there. That is generally the fact, and it is the results of the choices and life style of the marital partnership that matter in determining how its fruits are to be shared in a non-discriminatory way.

7. The fallout of the termination of a married lifestyle such as that chosen and enjoyed by these parties is likely to be what has happened in this case, namely that (a) the husband continues working and earning a very high remuneration, and (b) the wife continues to act as the primary caretaker of the children living with them at the matrimonial home. Save for the financial provision that is made by the husband they both do this without the continued day to day emotional and practical support of the other and the continued emotional pleasure and stability of a home for them both with the children.

8. They both therefore in large measure continue to perform, in different households, their respective roles as they have been developed during the marriage.

9. To my mind given the successes of this marriage and the amount of money available to the parties it is a great pity that, with the benefit of unemotional advice, they have been unable to reach agreement as to what would be fair and have become embroiled in arguments described in submission as "hot topics", in big money cases, concerning the effect and application of the guidance given by the House of Lords in Miller & McFarlane.

10. The two central points raised in argument both relate to the husband's earnings and effectively to his bonuses. They were:

i) what bonuses should be included within the matrimonial acquest or family assets (which I shall refer to as the matrimonial property), and
ii) what award, if any, should be made in respect of future bonuses falling outside the matrimonial property.

11. It was correctly common ground that the relevance of the first question relates to the application of the yardstick of equality. In argument what was focused on was where the line should be drawn to identify the assets to which in this case that yardstick applies with such force that, as was common ground, it effectively dictates an equal division of the value of those assets. The second question is directed to earnings falling on the other side of the line that is drawn.

12. There is also a dispute as to the amount of the periodical payments that the husband should make for the children. It is common ground that the court has jurisdiction to make such orders because the husband is habitually resident abroad. I shall deal with this separately at the end of this judgment.

A chronology
13. A chronology demonstrates the history of the marriage

5 May 1960 W born (46)

21 June 1962 H born (44)

1982 Parties meet at Oxford (St. John's College)

1983 to 1985 W teaches at a comprehensive school

6 February 1984 H joins a firm, who are later taken over by a major bank for whom he has worked (in its various incarnations) ever since

19 October 1985 Marriage

1985 to 1987 W teaches at a school for girls

1988 H is posted to Tokyo

9 August 1988 D (18) born. She has just finished her last year at school and gained a place at Oxford having failed to gain a place at medical school last year

1989 W teaches at a university near Tokyo

1990 Family (M F and D) returns to UK

23 August 1992 F born (14). She is at a private boarding school, she started there in September 2005

January 1993 H is again posted to Tokyo. W and the two young children go with him

11 March 1995 O born (11). He is at a private preparatory school and the plan is that he will go to a private boarding school. He boards part time

1996 Family (F, M and three young children) return from Japan. The parties then acquire their last matrimonial home

18 February 1997 H born (9), she is at the same preparatory school as O, boards part time and the plan is that she will go to a private boarding school
2000 W teaches part time at a comprehensive school

2003 W teaches part time at a primary school

c. March 2004 An apartment in London is purchased

2004 to early 2005 W teaches part time at a school in Ipswich, and ceased to do so because of the prospect that she and H may go abroad

September 2004 H forms a relationship with his present partner

24 December 2004 H announces dissatisfaction with the marriage

9 January 2005 H leaves the matrimonial home

Early 2005 There were some attempts at reconciliation and a visit by H to the matrimonial home in February

24 May 2005 Petition by W: section 1 (2) (a)

31 May 2005 A short and last stay by H at the matrimonial home. W qualifies the date of 31 May 2005 in her Form E, by saying that: "As recently as August [2005] he was discussing the possibility of me and the children living with him in Zurich, when he takes up a new job there…"

21 June 2005 H buys another property which is close to the two younger children's school. It is a nice home but not on the scale of the matrimonial home

12 July 2005 Form A by H

12 July 2005 H's solicitors write saying, "I have heard from my client that our clients' various attempts at reconciliation are now agreed to have failed." W says H is still in direct contact with W and this was accepted by him

18 July 2005 Form A by W

August 2005 W goes to H's home to discuss reconciliation

September 2005 Final attempts at reconciliation fail

23 December 2005 Decree nisi

January 2006 H posted to Z

14. The chronology demonstrates the overall description of the marriage I have already given. The husband agreed in evidence that it was accurate but left some things out. If the wife had been asked the same question I am confident that she would have given a similar answer.

15. Both parties gave their evidence in an open and honest way. They have both clearly suffered in their different ways from the breakdown of their marriage and its aftermath. They are now rebuilding their separate lives. They are both able and likeable individuals.

16. The wife was fully supportive of the husband's career going to Tokyo twice. Up to, and then even more so during 2005 and afterwards, the wife has shouldered the work involved with the children including university applications for D and a move to a new school for F.

17. The posting to Z was a sideways move for the husband to a new area of work and responsibility. The husband has had a successful career but before this last sideways move was one of a few candidates for a promotion which he did not achieve. His present role does not have an identified path for promotion to the next, and as I understand it, effectively top tier of the Bank's management structure. But the possibility of another move and then promotion exists. It was common ground that for the future years that the wife argued should be taken into account in respect of the husband's earnings the likelihood is that he will continue to receive substantial bonuses equivalent to those over the last few years and thus of the order of £4m gross.

The Assets
18. There is agreement as to the identity and valuation of the assets excluding chattels (which have been divided in specie by agreement). The assets include three properties, namely the matrimonial home (and it is common ground that this should go the wife) with a net value of about £2.7m, a new property bought by the husband and the London apartment (which it is common ground will remain with or go to him) with net values of around £600,000 and £1.5m. There are stocks and shares, policies, accounts and a pension. It is agreed that the pension should be divided equally (£1.5m approx each). Also there are the deferred elements of the husband's bonuses.

19. The husband's bonus relates to the calendar year and is announced early in the next year. So for the working year 2005 his bonus (the 2006 bonus) was announced in early 2006 and for the working year 2006 it (the 2007 bonus) was due to be announced at or about the time of the hearing. At the time of the hearing the detail of the 2007 bonus was not known but I was provided with an agreed up dated schedule of the assets to include the detail of the 2007 bonus which is to be based on a total of £4m. As in previous years the husband will receive (i) cash, (ii) deferred shares by reference to the share price on a defined day (28 February 2007 for the 2007 bonus) which will vest in equal annual blocks over three years (31 March 2008, 2009 and 2010 for the 2007 bonus), and (iii) some options vesting in March 2010 (for the 2007 bonus) the number of which is also dependent on the share price on the defined day.

20. Agreed figures are:

i) total assets excluding all elements of the 2007 bonus, £27,068,860,
ii) total assets including all elements of the 2007 bonus, £29,416,144,
iii) all elements of the 2007 bonus, £2,347,284, and
iv) the parts of the 2006 bonus paid, or to be paid, in shares and options based on current share prices (and thus the figure for this included in the total assets recorded in (i) and (ii)), £2,380,538 which gives total assets excluding that sum of £24,688,322. (No attempt has been made to disentangle the cash elements of the husband's earnings for the working years up to the end of 2005).

21. The assets as at January 2005 (and as at later dates) include deferred elements of bonus in the form of shares and options for shares in the Bank for whom the husband works.

The respective positions of the parties
22. The husband argues that a fair result is a 50/50 division of the assets excluding the 2007 bonus but including the 2006 bonus and thus 50% of £27,068,860 (namely £13,534,430). This would be 46.01% of the assets including the 2007 bonus and 54.82% of the assets excluding the 2006 and 2007 bonuses.

23. The wife argues that a fair result is a 50/50 division of the total of the assets including the 2007 bonus (i.e. half of £29,416,144 = £14,708,073) plus £1.5m = £16,208,072. That is 55% of the total of the assets including the 2007 bonus, 59.88% of the assets excluding the 2007 bonus and 65.65% of the assets excluding the 2006 and 2007 bonuses.

24. As can be seen from those positions the husband agrees to a 50/50 division of the 2006 bonus (and thus its inclusion on that basis). But his argument is that the matrimonial property should exclude the 2006 bonus and that there are powerful arguments, which he did not pursue, that a fair award would be half of the values of the assets excluding that bonus. So he argues that he should not be disadvantaged in any way by the fact that he has included half of the 2006 bonus in his offer: I agree.

25. The wife argues that the matrimonial property includes both the 2006 and 2007 bonuses and that she should receive the additional £1.5 million as compensation for her loss in the future of a share of the husband's income and her interest in his earning capacity. Alternatively she argues that if the matrimonial property excludes either or both of those bonuses the sum of £1.5m should increase to reach the same result or, in any event, a result that exceeds the husband's offer.

The wife's predicted expenditure / needs
26. The wife asserts a capital need to retain the matrimonial home and to incur some £15,000 of immediate capital expenditure. Cars are covered by recent purchase and her revenue needs. She mentioned in her Form E a wish to acquire a flat in London but has not pursued that by, for example, including its upkeep in her detailed schedule of expenditure and no property particulars were produced. In any event the husband asserted, and this was not challenged, that on his proposals (and therefore inevitably on her proposals) she will have ample surplus capital and income to acquire such a property if that is what she wants to do.

27. I heard no argument, or evidence, on the wife's budget. In written submission the husband made a number of points about it including assertions that:

i) the workings of a 10% contingency charge in a planned maintenance report relating to the matrimonial home are spurious and an unjustifiable overage,
ii) the inclusion of a full time staff of four to assist the wife in the running of her home, not just for the time being, but for the rest of her life, is unjustifiable,
iii) £13,000 p.a. for insurance is included although the husband's Form E disclosure shows that the total of the premiums for the buildings, contents and all associated cover was (for the year to 24.9.06) just £6,069, so that the claimed figure is approximately 120% more than the true figure, adding almost £7,000 p.a. to the overall running costs of the home,
iv) continued running costs of a Ford Galaxy are included notwithstanding the substitution of that car with a new Ford Galaxy and the associated expenses of running that car which are also in the schedule, with the consequence that there is plain double counting of about £2,100 p.a., and
v) an average of about £6,000 p.a. for the "replacement of arboreal failures" is included which seems to be a figure that is "plucked out of the air" and is probably much more than is really likely to be spent on such items.

28. I am not in a position to determine the detail of the potential disputes relating to the budget but the upshot of the husband's written submission was that he took a total for the wife's expenditure (excluding the sum of £180,570 claimed for the children) as being £287,772 per annum. This includes all the sums claimed other than the 10% contingency (about £15,000). It was suggested, and this was not challenged, and I agree, that that is a figure which, even having regard to the amount of husband's income, is a more than generous assessment of the wife's revenue needs.

29. The submission based on that figure, which also was not challenged, was that the husband's proposals amply meet even the most ambitious calculation of wife's own claimed needs.

30. In support of that it was pointed out that:

(i) to meet such an income requirement would (on the usual "Duxbury assumptions") require the wife to have total funds invested of about £7.5m if she was to amortise the whole sum (and received it all immediately). If she is not to amortise her capital, but is to be entitled to preserve the initial fund, she would need a starting fund of about £8.5m,
(ii) the husband's proposal is that in addition to the matrimonial home she would receive immediately available (or at least available by the end of March 2007) assets of some £10m, as well as in the future further sums from delayed elements of his bonuses (up to and including the 2006 bonus), the wife's share of which is currently predicted to be around £800,000,
(iii) if the wife receives a total of £10.8m (in addition to her home) and spends at a rate of £287,772 per annum index linked for the whole of the rest of her life, her fortune will swell to something in the region of £29m (plus her home) by the time she is 87,
(iv) the husband's proposal would therefore put the wife in a position in which at the start she will have something in the region of £2.3m more than the most generous assessment of her needs, and assets which will enable her fortune to swell as she grows older.

31. As I understand it the calculations were done on the basis that the wife did not receive half of the pension fund but immediately realisable assets. However the equivalent point can be made on the basis now agreed that there should be a 50/50 pension sharing order.

32. It was of course accepted by the husband that to the extent that wife's claim relates to a fair (and in this case it was accepted an equal) share of the matrimonial property "need" is not a limiting factor.

Some starting points
33. To my mind it is clear from White v White [2001] 1 AC 596 (White) and Miller & McFarlane that:

i) the court must apply the statutory provisions,
ii) the overall aim is to reach a fair result,
iii) the claimant is not a supplicant, each party to a marriage is entitled to a fair share, and the search is always as to the requirements of fairness in the particular case,
iv) there is no gender discrimination,
v) the yardstick of equality is to be applied as an aid and not a rule,
vi) fairness has a broad horizon and inherent flexibility, and
vii) in identifying the rationale for awards in Miller & McFarlane the House of Lords through both Lord Nicholls and Baroness Hale are not setting rigid rules or formulae but are identifying principles guiding the court's approach and thus its reasoning in applying the MCA (see Lord Nicholls at paragraphs 4, 6, 26, and Baroness Hale at paragraphs 122, 124, 137 and 144 (note her acknowledgment of the common ground with Lord Nicholls in the identification of three principles and her reference in paragraph 137 to there being at least three).

34. In my view point (vii) is important and the paragraphs I have mentioned acknowledge the tension between promoting fairness (a) by enabling parties and advisers to predict results, whilst (b) retaining the flexibility given by the statute that is necessary to enable a fair result to be achieved in the circumstances of the given case.

35. In my view when reading and applying the guidance given by the House of Lords it is important not to forget the facts and circumstances of the cases they were dealing with and to see how they were applied in them. Also it should be remembered that Baroness Hale expresses common ground with Lord Nicholls as to the three principles of need, compensation and sharing and that the only divergence between them that is identified by Lord Mance relates to the identification of the matrimonial property to which the yardstick of equality may readily be applied (see paragraphs 167 and 168).

36. The divergence identified by Lord Mance was primarily triggered by consideration of the Miller case. In my view, in discussing it he highlights (a) the inter relationship between (i) the identification of the matrimonial property, and (ii) the application of the yardstick of equality, and (b) the difficulties that can arise from rigidity in respect of taking a date or drawing a line to identify assets to which the yardstick readily applies and thus inevitably to identify assets to which it applies less readily. He however favours, and thus the majority of the House of Lords favour, the narrower approach taken by Baroness Hale to the identification of the matrimonial property to which the yardstick of equality applies readily and with compelling force given the principle of non discrimination.

37. The majority therefore favour an approach that (a) takes a more limited view than that taken by Lord Nicholls to the identification of the matrimonial property, and (b) looks at the balance of available assets on the basis that the yardstick does not apply to it with such readiness or force.

38. It is however acknowledged that in most cases the same result would be reached if the matrimonial property is more widely defined and the exercise is one of disapplying the force of the yardstick to assets which on the more narrow approach would not have been included within the matrimonial property to which it is readily applied. Indeed it is clear that both approaches can easily reach the same result, one by a process of reasoning that some of the assets outside the identified matrimonial property should nonetheless, as a matter of fairness, be divided equally and the other by a process of reasoning that some of the assets within that pool should not be divided equally.

39. To my mind this identified divergence of approach and the recognition that in most cases it will not produce a different result demonstrates and confirms that what the House of Lords is doing is to identify a process of reasoning to achieve the aim of fairness in the application of the statutory provisions on a reasonably consistent and objective basis.

General comment on the approach and argument of both parties
The approach to the guidance in Miller & McFarlane
40. Both sides correctly acknowledged that the task of the court was to apply the statutory test and thus to have regard to the s. 25 criteria. Thus, for example, it was common ground that the husband's income and earning capacity were matters to which the court was directed to have particular regard.

41. However in my judgment from that correct starting point both sides fell into error in arguing what were described as the "hot topics" by treating, or seeking to treat, the guidance given by the House of Lords as if it was a series of statutory tests and that a pass or a failure of those tests led to particular and set results.

42. The arguments were, or came close to, an assertion that given the length of this marriage and, because of that the force of the application of the yardstick of equality to the fruits of the marital partnership it was appropriate at the first stage of the court's reasoning for it (1) to define the matrimonial property with precision, (2) to divide its value in half, and (3) to treat that result as an established and unalterable part of the award. For example, one progression in the argument advanced on behalf of the wife was that the matrimonial property included the 2006 and 2007 bonuses and therefore she was effectively entitled to half of them and then to a further award in respect of future earnings. The husband took a similar approach to exclude both those bonuses from a 50/50 division by an application of the yardstick to the matrimonial property.

43. In my judgment this is an incorrect approach because (i) it ignores the flexibility of the statutory provisions and the objective of achieving a fair result in the given case that was emphasised by the House of Lords, and (ii) it seeks to impose a certainty or rigidity of division on a foundation of the matrimonial property and thus on a concept that (a) is not expressly mentioned by the MCA, and (b) cannot always easily or precisely be identified and valued.

44. The error of applying guidance as to the application of a statutory test as if it was itself such a test has been pointed out in a number of areas, see for example In re Sevenoaks [1991] Ch 164 where at 176F, in respect of guidance given by judges as to the application of the test set down by s. 6 of the Company Directors Disqualification Act 1986 (the CDDA) namely whether the person's conduct as a director "makes him unfit to be concerned in the management of a company", Dillon LJ said:

"Such statements may be helpful in identifying particular circumstances in which a person would clearly be unfit. But there seems to have been a tendency, which I deplore, on the part of the Bar, and possibly on behalf of the official receiver's department, to treat the statements as judicial paraphrases of the words of the statute, which fall to be construed as a matter of law in lieu of the words of the statute. The result is to obscure that the true position to be tried is a question of fact – what used to be pejoratively described in the Chancery Division as a 'jury question' "

45. I acknowledge that guidance as to the statutory test set by the MCA can be said to be different to the guidance referred to by Dillon LJ in that the test under the MCA does not fall to be construed as a matter of law in the same way as the shorter statutory test on unfitness in the CDDA. Nonetheless, in my view, the comment as to the application of judicial guidance as judicial paraphrases of the words in the statute and thus as statutory tests is apposite and relevant. I would respectfully suggest that this error was one of the problems that lead to the approach adopted under the MCA of making awards by reference to "the wife's reasonable requirements" and then a Duxbury calculation to meet them. This was held to be incorrect in White, in which the phrase "the wife's reasonable requirements" was described as an alluring judicial phrase.

46. In my judgment I should not fall into similar error by reference to the phrases and concepts "matrimonial acquest" and "family assets" (and therefore matrimonial property) which can also be described as alluring judicial phrases. This is particularly so because:

i) they lead to an application of the yardstick of equality and thus to a quantification of an award (as did the phrase "the wife's reasonable requirements" by reference to a Duxbury calculation when a clean break was ordered),
ii) even though the yardstick of equality applies readily and with force to such assets, it does not do so as a matter of course, and it does not necessarily lead to an equal division of the capital value of the matrimonial property,
iii) as Lord Mance points out, it is as to the extent and identification of this concept that Baroness Hale (and the majority in the House of Lords) differ from Lord Nicholls although, as I have mentioned, it is accepted that this difference is in most cases not going to produce a different result, and
iv) whichever approach is adopted to the concept of matrimonial property, it is not always easy to identify all of it precisely.

47. I appreciate that there are attractions in seeking to achieve clarity by applying judicial guidance, and the concepts set out therein, but it seems to me that particularly when such concepts themselves introduce uncertainties and value judgments the attraction is flawed and can lead to a flawed progression of analysis and argument in achieving the ultimate goal of an application of a statutory test to achieve a fair result.

48. I hasten to add that that does not mean that the process of reasoning identified by the guidance given by the House of Lords is not to be followed. Rather in my view it means that when following it, with a view to achieve the overall aim of a fair result, the court must take care not to create set or rigid stepping stones, or apply a formulaic approach, that is not set out in the statute.

49. So it seems to me to be more sensible, and in accordance with the statutory test and the guidance (i) to have regard to the particular circumstances of a given case when considering concepts such as the matrimonial property and the application of the yardstick of equality and thus to the range of reasonable possibilities in their application, (ii) to stand back and take an overview of the circumstances of a given case by reference to those possibilities and the guidance and the flexibility built into it, and therefore (iii) not to take a formulaic or progressive approach that introduces a set and unalterable ingredient of the award (e.g. half of the matrimonial property) particularly when an aspect of its evaluation is not clear or common ground.

The approach to other authority
50. To inform a process of reasoning it is of course instructive to look at English and foreign authorities.

51. Counsel for the wife spent some time referring to foreign authority. Given that it was accepted that future earnings and earning capacity were matters that the MCA directed the court to have particular regard to, and that such foreign cases dealt with different statutory provisions, predate the recent guidance of the House of Lords and are distinguishable on their facts I have not found them of any real assistance. What it seems to me is important is to consider whether the points argued to be demonstrated by them are consistent with the MCA and the guidance given by the House of Lords.

52. Counsel for the wife also emphasised a submission that M v M (Financial Relief: Substantial Earning Capacity) [2004] 2 FLR 236 has been overruled by Miller & Mcfarlane. I was told that an appeal in M v M had been compromised on confidential terms but that if this had not happened the arguments on appeal on behalf of the wife in that case would have been similar to the attack made on the decision by counsel for Mrs McFarlane in his argument before the House of Lords in Miller & McFarlane. M v M is not expressly overruled and is only expressly mentioned in paragraph 18 of the speech of Lord Nicholls. To my mind it is an unproductive exercise to seek to analyse whether, and the extent to which, M v M has been so overruled by the guidance given in Miller & Mcfarlane. Clearly M v M has to be read in the light of, and the guidance it gives has been overtaken by, the guidance of the House of Lords in Miller & McFarlane. This general approach also applies to other authorities that predate that guidance. I shall return to the argument advanced in the House of Lords by counsel for Mrs McFarlane as reported in [2006] 2 AC at 626/7, and adopted by counsel for the wife in this case.

53. In my judgment my task is to apply the MCA in the light of the guidance, and thus by applying the principles, approach and rationale, set out in Miller & McFarlane and White. Explanations given by other courts of the application of that, and earlier, guidance is informative but in my view detailed analysis to seek to match one case with another and thereby treat another application of guidance or the MCA as binding is not productive, particularly if the earlier case does not provide reasons for a choice between rival arguments advanced before it. Rather what the court needs to do is to explain its decision by reference to the MCA and the guidance in the light of other decisions doing the same thing to achieve consistency of approach and reasoning.

Setting dates and drawing lines
54. In the application of the statutory test under the MCA which looks to past events and to the future it is inevitable that the court will have regard to current values at the time it makes its award. This does not mean that such a value would identify the value of the matrimonial property to which the yardstick of equality applies with force. Further, as in Miller, that yardstick may not be a fair one to apply whichever date is taken for the identification and valuation of the matrimonial property.

55. If those assets include one that can change in value the reasons for any increase or decrease in value over a relevant period would be a factor to be taken into account. For example, the value of a property, or the shares in a public or a private company, could go up or down for a great variety of reasons and it seems to me to run counter to the objective of the MCA, its terms and the guidance of the House of Lords to seek to set tests, or formulae, as to how these changes should be taken into account in a given case (see for example Baroness Hale at paragraph 158 of her speech in Miller & McFarlane).

56. Both sides drew attention to the judgment of leading counsel for the wife (when sitting as a Deputy High Court Judge) in Rossi v Rossi [2006] 3 FCR 371 and in particular to paragraph 24 thereof and the general approval of that paragraph by Singer J in S v S (Ancillary Relief after Lengthy Marriage) [2006] EWHC (Fam) at paragraph 111. Of particular relevance to this case is the following extract from paragraph 24:

"[24.4] If the post-separation asset is a bonus or other earned income then it is obvious that if the payment relates to a period when the parties were cohabiting then the earner cannot claim it to be non-matrimonial. Even if the payment relates to a period immediately following separation I would myself say that it is too close to the marriage to justify categorisation as non-matrimonial. Moreover, I entirely agree with Coleridge J when he points out that during the period of separation the domestic party carries on making her non-financial contribution but cannot attribute a value thereto which justifies adjustment in her favour. Although there is an element of arbitrariness here I myself would not allow a post-separation bonus to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation."

57. The general approval of Singer J is to the approach set out in paragraph 24 as a whole. Neither case involved an issue relating to bonuses for continuing employment so both the comment relating to bonus and the approval of it are obiter. I do not agree with the approach set out in the last sentence of paragraph 24.4. It seems to me that the nature of the underlying problem and the relevance of the identification of the matrimonial property (i.e. the application of the yardstick) point strongly to a conclusion that an approach that is acknowledged to be arbitrary, and which therefore does not have regard to the realities and circumstances of a given case, is not correct. This is particularly so if, as was the case here, that arbitrary approach is used to try and set a fixed ingredient of the award on the basis that the yardstick of equality applies to it readily and with force.

58. Further, internally it begs the question: When is the separation to be taken to have taken place? Which in turn begs the question: What is meant by separation in this context? The arguments here, and common sense, show that it is often going to be the case that this date cannot be identified with any certainty because it will not be uncommon that there will be a period during which attempts at reconciliation are attempted. Such an arbitrary rule also plainly gives rise to the potential for arguments by reference to, for example, company years or accounting periods in respect of which bonus (or other income) is calculated and the possibility of a whole year's bonus being excluded or included if for example parties separated on 30 December, or on 2 January. Such arguments could be met by arguments on apportionment and it may well be that whenever the cut off occurs apportionment would be necessary. But in my view the need to introduce such arguments is an indication that it is wrong to introduce an arbitrary approach to determine the divide between assets to which the yardstick applies so as to effectively demand an equal division of them and those to which the yardstick applies, or may apply, differently.

59. I pause to comment that in my view salary and bonus give rise to different or additional issues to those that might arise in respect of the income steam from assets (e.g. a dividend yield from a private company, or royalties).

60. More generally in my judgment this acknowledged arbitrary approach which seeks to draw a clear line between different applications of the yardstick:

i) is contrary to the flexibility inherent in the application of the underlying rationale that each party to a marriage is entitled to a fair share of the economic fruits of the marital partnership and the joint endeavours of the parties to it on a non-discriminatory basis because it seeks to introduce an unnecessary restriction or formulaic approach, and
ii) wrongly fails to have proper regard to the actual effects and circumstances of the breakdown of the relationship between, and the separation of, the parties to the marital partnership.

61. In my judgment the correct approach in this case is the one I adopt later in this judgment to the treatment of the husband's bonuses.

The results in the McFarlane and Miller cases
62. These results do not provide determinative guidance in the present case.

McFarlane
63. This case involved a husband who was a high earner and a wife who had given up the opportunity of progressing through her profession to a position where her earnings might have been equivalent. There was not enough capital to make a clean break fair. The decision of the House of Lords was that the wife should receive periodical payments the amount of which was not limited to her needs until such time as, on an application by the husband (or the wife), it was shown that the periodical payments order should be discharged and a deferred clean break achieved with the payment of a lump sum pursuant to s. 31(7A) of the MCA.

64. This demonstrates that it was accepted by the House of Lords that her periodical payments order based on needs, compensation and sharing could be brought to an end in the future but does not shed light on how her compensation and sharing claims would be taken into account and quantified at that stage. Equally the result in McFarlane does not show how the House of Lords would have taken into account the husband's future earnings and his (enhanced) earning capacity at that stage, or at the time the case was decided if there had then been sufficient capital built up during the marriage to effect a clean break.

65. The case was regarded as the paradigm case for an award of compensation in respect of future economic disparity because of the point that the way the parties conducted their marriage severely handicapped and diminished the wife's potentially considerable earning capacity. It therefore does not address the approach that should have been taken if the wife had not had such an earning potential. Also the case does not show how, if at all, the loss of a future share in the product of the husband's enhanced earning capacity, as opposed to his actual earnings, was taken into account in assessing the amount of the periodical payments.

Miller
66. In Miller an immediate clean break could be achieved fairly but the identification of the matrimonial property and the issues relating to the amount of the award are different to those that exist here.

Clean break
67. In paragraph 133 of Miller & McFarlane Baroness Hale says:

"Section 25A is a powerful encouragement towards securing the court's objective by way of lump sum and capital adjustment (which now includes pension sharing) rather than by continuing periodical payments. This is good practical sense. Periodical payments are a continuing source of stress for both parties. They are also insecure. With the best will in the world, the paying party may fall on hard times and be unable to keep them up. Nor is the best will in the world always evident between formerly married people. It is also the logical consequence of the retreat from the principle of the life-long obligation. Independent finances and self-sufficiency are the aims. Nevertheless, section 25A does not tell us what the outcome of the exercise required by section 25 should be. It is mainly directed at how that outcome should be put into effect."

68. It is plain, and a common occurrence, that in achieving a clean break the future earnings and earning capacity of the paying party is taken into account to fund a borrowing to make a lump sum payment, or to demonstrate that an initial imbalance will be recovered. Although it is not relevant to this case I pause to make the general comment in respect of this passage that future uncertainties, and thus the possibility of a paying party falling on hard times, can render the burden on the paying party of meeting interest payments unfair at the outset and thus a clean break unfair. If a clean break is ordered and the paying party falls on hard times it is only that party (and perhaps his or her new family) who suffer and that suffering can, for example, lead to bankruptcy. I therefore offer the thought that a clean break based on a borrowing that imposes a heavy, lengthy and unalterable burden on the paying party could be unfair and could be said to discriminate against the paying party.

69. In my view the reference in that passage from the speech of Baroness Hale to independent finances and self-sufficiency being the aims echo other passages in the speeches and show that this is the objective so long as it can be achieved fairly.

My approach and reasoning in this case
Passages in the speeches in Miller & McFarlane
70. It was correctly common ground that all of the speeches have to be read as a whole and that passages in them should be read in their context. But inevitably argument focused on some paragraphs more than others. I cite many of them below.

A central problem
71. As I have already mentioned factors in this case are that unlike the McFarlane case (a) the wife did not give up a potentially high earning career with the result that her claim is not, and cannot be, based on an argument that she did so and therefore the reason why McFarlane was a paradigm case is absent, and (b) a clean break is possible now and is urged by both sides.

72. In these, and other contexts, I was particularly referred to:
(1) Paragraphs 13 to 16 of the speech Lord Nicholls, where he says:

"13. Another strand, recognised more explicitly now than formerly, is compensation. This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage. For instance, the parties may have arranged their affairs in a way which has greatly advantaged the husband in terms of his earning capacity but left the wife severely handicapped so far as her own earning capacity is concerned. Then the wife suffers a double loss: a diminution in her earning capacity and the loss of a share in her husband's enhanced income. This is often the case. Although less marked than in the past, women may still suffer a disproportionate financial loss on the breakdown of a marriage because of their traditional role as home-maker and child-carer.

14. When this is so, fairness requires that this feature should be taken into account by the court when exercising its statutory powers. The Court of Appeal decision in SRJ v DWJ (Financial Provision) [1999] 2 FLR 176, 182, is an example where this was recognised expressly.

15. Compensation and financial needs often overlap in practice, so double-counting has to be avoided. But they are distinct concepts, and they are far from co-terminous. A claimant wife may be able to earn her own living but she may still be entitled to a measure of compensation.

16. A third strand is sharing. This 'equal sharing' principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals. In 1992 Lord Keith of Kinkel approved Lord Emslie's observation that 'husband and wife are now for all practical purposes equal partners in marriage': R v R [1992] 1 AC 599, 617. This is now recognised widely, if not universally. The parties commit themselves to sharing their lives. They live and work together. When their partnership ends each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less. But I emphasise the qualifying phrase: 'unless there is good reason to the contrary'. The yardstick of equality is to be applied as an aid, not a rule.", and

(2) To paragraphs 140, 141, 142, 144, 149 and 154 of the speech of Baroness Hale, where she says:

"140. A second rationale, which is closely related to need, is compensation for relationship-generated disadvantage. Indeed, some consider that provision for need is compensation for relationship-generated disadvantage. But the economic disadvantage generated by the relationship may go beyond need, however generously interpreted. The best example is a wife, like Mrs McFarlane, who has given up what would very probably have been a lucrative and successful career. If the other party, who has been the beneficiary of the choices made during the marriage, is a high earner with a substantial surplus over what is required to meet both parties' needs, then a premium above needs can reflect that relationship-generated disadvantage.

141. A third rationale is the sharing of the fruits of the matrimonial partnership. ---------------

142. Of course, an equal partnership does not necessarily dictate an equal sharing of the assets. In particular, it may have to give way to the needs of one party or the children. Too strict an adherence to equal sharing and the clean break can lead to a rapid decrease in the primary carer's standard of living and a rapid increase in the breadwinner's. The breadwinner's unimpaired and unimpeded earning capacity is a powerful resource which can frequently repair any loss of capital after an unequal distribution: see, eg, the observations of Munby J in B vB (Mesher Order) [2002] EWHC 3106 (Fam); [2003] 2 FLR 285. Recognising this is one reason why English law has been so successful in retaining a home for the children. ---------------------

The ultimate objective?
144. Thus far, in common with my noble and learned friend, Lord Nicholls of Birkenhead, I have identified three principles which might guide the court in making an award: need (generously interpreted), compensation, and sharing. I agree that there cannot be a hard and fast rule about whether one starts with equal sharing and departs if need or compensation supply a reason to do so, or whether one starts with need and compensation and shares the balance. Much will depend upon how far future income is to be shared as well as current assets. In general, it can be assumed that the marital partnership does not stay alive for the purpose of sharing future resources unless this is justified by need or compensation. The ultimate objective is to give each party an equal start on the road to independent living. --------------------

149. The question, therefore, is whether in the very big money cases, it is fair to take some account of the source and nature of the assets, in the same way that some account is taken of the source of those assets in inherited or family wealth. Is the 'matrimonial property' to consist of everything acquired during the marriage (which should probably include periods of pre-marital cohabitation and engagement) or might a distinction be drawn between 'family' and other assets? Family assets were described by Lord Denning in the landmark case of Wachtel v Wachtel [1973] Fam 72, at 90:

"It refers to those things which are acquired by one or other or both of the parties, with the intention that there should be continuing provision for them and their children during their joint lives, and used for the benefit of the family as a whole."

Prime examples of family assets of a capital nature were the family home and its contents, while the parties' earning capacities were assets of a revenue nature. But also included are other assets which were obviously acquired for the use and benefit of the whole family, such as holiday homes, caravans, furniture, insurance policies and other family savings. To this list should clearly be added family businesses or joint ventures in which they both work. It is easy to see such assets as the fruits of the marital partnership. It is also easy to see each party's efforts as making a real contribution to the acquisition of such assets. Hence it is not at all surprising that Mr and Mrs McFarlane agreed upon the division of their capital assets, which were mostly of this nature, without prejudice to how Mrs McFarlane's future income provision would be quantified. -----------------

Application in the McFarlane case
154. There is obviously a relationship between capital sharing and future income provision. If capital has been equally shared and is enough to provide for need and compensate for disadvantage, then there should be no continuing financial provision. In McFarlane, there has been an equal division of property, but this largely consisted of homes which can be characterised as family assets. This was not enough to provide for needs or compensate for disadvantage. The main family asset is the husband's very substantial earning power, generated over a lengthy marriage in which the couple deliberately chose that the wife should devote herself to home and family and the husband to work and career. The wife is undoubtedly entitled to generous income provision for herself and for the sake of their children, including sums which will enable her to provide for her own old age and insure the husband's life. She is also entitled to a share in the very large surplus, on the principles both of sharing the fruits of the matrimonial partnership and of compensation for the comparable position which she might have been in had she not compromised her own career for the sake of them all. The fact that she might have wanted to do this is neither here nor there. Most breadwinners want to go on breadwinning. The fact that they enjoy their work does not disentitle them to a proper share in the fruits of their labours. "

73. It was argued on behalf of the husband that the double loss referred to by Lord Nicholls in paragraph 13 was two sides of the same coin and it was submitted that, to establish an award based on compensation, what has to be established is an actual and demonstrable loss that created a benefit for the other party. It was said that McFarlane is a classic case and therefore that the classic case is one in which a wife gives up a potentially highly lucrative career or job. In support of that, particular reliance was placed on the passages in paragraphs 144 and 154 of the speech of Baroness Hale that:

"144. ---- In general, it can be assumed that the marital partnership does not stay alive for the purpose of sharing future resources unless this is justified by need or compensation. ----

154. ---- There is obviously a relationship between capital sharing and future income provision. If capital has been equally shared and is enough to provide for need and compensate for disadvantage, then there should be no continuing financial provision. ----"

74. In my judgment in its context this reference to a wife suffering a double loss in paragraph 13 cannot be so limited notwithstanding that literally it is linked to the sentence immediately before it. In my view the reference by Lord Nicholls to "a loss in a share of the husband's enhanced income" (my emphasis) rather than to his income or earning capacity is a reference to a product or fruit of the marital partnership and thus a "value added" by the common endeavours of the parties during the marital partnership. This is likely to be unquantifiable but it is at least arguably reflected by a part of the husband's future earnings. This echoes what Lord Nicholls said at page 605H/606B in White, namely that:

"Today there is a greater awareness of the extent to which one spouse's business success, achieved by much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years. There is an increased recognition that, by being at home and having and looking after young children, a wife may lose for ever the opportunity to acquire and develop her own money-earning qualifications and skills…"

75. To my mind Lord Nicholls in paragraph 13 of Miller & McFarlane is therefore identifying something created during the marital partnership that but for that partnership, and the common endeavours of the parties to it, would not have existed, or may not have existed. That product is, or may only be, realisable in the future, but in one sense it is not a future resource because it has been created during the partnership. It is something intangible that will continue over a period of time to produce an enhanced income for the husband, so long as he continues to be employed in equivalent work. It therefore fits within the heading "compensation" together with other elements of the concept. If, as might be the case, with a royalty or the profits (after deduction of remuneration) of a company a capital value can be placed on such an asset I accept that the wife's entitlement and award by reference to it might be classified as one based on sharing rather than compensation. Normally such a capital value would be based on a multiple of earnings or profits and is time limited in this way.

76. In my view, a reasoning process that brought enhanced income or earning capacity into account by reference to the concept of sharing rather than compensation is permissible. The categorisations within the rationale and reasoning process are not so distinct and watertight. Indeed Lord Nicholls recognises the overlap between financial needs and compensation in paragraph 15, and his description of sharing in paragraph 16 is wide enough to cover an award in respect of an enhanced income or earning capacity and thus economic disparity flowing from it. Also he points out that double counting should be avoided, as does Baroness Hale in paragraph 137 where she also indicates that any or all of the elements of the rationale might provide the basis for an award.

77. Thus it seems to me that a wife who was never on the road to becoming a high earner could have disadvantages by reference to (a) her potential level of income in the job market arising from her role in the marriage (which could extend to a practical inability to obtain any appropriate employment or an income that should be taken into account), and (b) her loss of a share in a fruit of the marital partnership namely the product of the husband's enhanced income and earning capacity, covered under the headings needs and sharing rather than compensation. But they could also be included under the heading compensation.

78. In paragraph 154 Baroness Hale refers to the wife being entitled to a share in a large surplus, part of which will relate to this enhancement of income or earning capacity on the principles both of sharing the fruits of the matrimonial partnership and of compensation. Also in my view:

i) the passage in paragraph 144 relied on by the husband is qualified by the words "in general" and it is not directed to this point, but to the question whether the marital partnership should stay alive and therefore, for example, to the point whether a continuing commitment by the wife as the primary caretaker of the children should have this effect, and
ii) the passage in paragraph 154 relied on by the husband does not preclude the enhanced earning capacity or income of the husband being taken into account as compensation, or as part of the capital division.

79. More generally if enhanced income or earning capacity was excluded from compensation and, as a result, from being take into account at all in determining what the overall fair result should be under either needs or sharing; in my view this would fly in the face of an application of the principles of equality and non discrimination in the assessment of the fruits of the marital partnership, and the point that fairness requires the court to address a disproportionate financial loss to the party who during the marriage has earned, and who will continue to earn, a lower or no income (see for example paragraph 142 of the speech of Baroness Hale).

Future income and earning capacity as compared with an enhanced income and earning capacity
80. I accept that there is at least the potential for overlap between future income and earning capacity and enhanced future income and earning capacity and the dividing line between them is not capable of precise definition. I use the descriptions primarily to distinguish between the part of the husband's future income that can be said to be a fruit of the marital partnership and the part that cannot.

81. All of the husband's future income and earning capacity cannot be described as a fruit of the marital partnership. Indeed if a "but for" test is applied it is easy to say that but for the talents and energy of the husband he would not have achieved the earnings and earning capacity he has, but this cannot be said of the contribution made by the wife to his home life and the ability it gave him to concentrate on and prioritise his work (see for example paragraph 151 of the speech of Baroness Hale referring to the point that if the money maker had not had a wife to look after him no doubt he would have found others to do it for him).

82. The acknowledged fact in this case that the wife's role and contribution to the marital partnership was of great assistance to the husband in furthering his career is a consequence of the choices made by the parties to the marriage. Such a contribution as a supporter of the husband's career, as a home maker and as a caretaker of the children by a wife is substantial. In general, depending on, and subject to, factors such as the position at the start of the marital partnership and its length, on a non-discriminatory, equal and fair approach it founds the conclusion that pursuant to the yardstick there should be an equal division of the product of the husband's income earned during the marital partnership.

83. In my view the position changes when the marital partnership ends. This is because the joint venture and participation of the parties as equal partners in that marital partnership whose contributions to it are to be assessed in a non-discriminatory way ends. After that termination the focus is no longer on the effects of the contributions of the parties as equal partners in assessing the product of their partnership but with the effects of their separate contributions as the source of the husband's income in the future.

84. In considering the position after the termination of the marital partnership in my view it is the role and contribution of a wife during the marital partnership that forms the basis of the element of the husband's earning capacity and future income (i.e. his enhanced income or earning capacity) that can be said to be a fruit of that partnership. As Lord Nicholls points out in paragraph 85 in Miller & McFarlane the spadework for rewards received towards the end, and after the end, of the marital partnership has been done during it. The wife's role and contributions have enabled the husband to create a working environment which has produced greater (enhanced) rewards of which she should have a fair share.

85. However, in my view the balance of his future income and earning capacity is the product of the husband's talents, energy and good fortune, notwithstanding that he has been supported by the wife, and they have been applied, expended and enjoyed during the marital partnership

86. I, of course, accept that a wife who continues to act as the primary caretaker of the children of a marriage in a separate household continues to make a contribution to the family (my emphasis), or the marriage, after the end of the marriage (see for example Lord Nicholls at paragraph 85). In my view so does the husband who continues to meet their financial needs. But as this is looking at the position after the marriage is over these contributions whether described as being to the family or the marriage are not, in my view, contributions to the marital partnership because that is over.

87. I do not accept that such contributions by a wife to the family after the end of the marital partnership can generally be said to warrant a conclusion that a proportion of the husband's future income continues to be attributable to the wife's domestic contribution and thus a fruit of the marital partnership.

Legitimate expectation
88. Lord Nicholls refers to this in paragraphs 56 to 58 of his speech:

"'Legitimate expectation'
56. The next issue concerns the feature described by the judge as the key feature in the case. The judge said the key feature was that the husband gave the wife a legitimate expectation that in future she would be living on a higher economic plane.

57. By this statement I doubt whether the judge was doing more than emphasise the importance in this case of the standard of living enjoyed by Mr and Mrs Miller before the breakdown of their short marriage. This is one of the matters included on the statutory check list. The standard of living enjoyed by the Millers during their marriage was much higher than the wife's accustomed standard and much higher than the standard she herself could afford.

58. If the judge meant to go further than this I consider he went too far. No doubt both parties had high hopes for their future when they married. But hopes and expectations, as such, are not an appropriate basis on which to assess financial needs. Claims for expectation losses do not fit altogether comfortably with the notion that each party is free to end the marriage. Indeed, to make an award by reference to the parties' future expectations would come close to restoring the 'tailpiece' which was originally part of section 25. By that tailpiece the court was required to place the parties, so far as practical and, having regard to their conduct, just to do so, in the same financial position as they would have been had the marriage not broken down. It would be a mistake indirectly to re-introduce the effect of that discredited provision. "

89. In my view this is relevant to the treatment of both future income generally and the loss of a share of a husband's enhanced future income and earning capacity. The point that both parties to a marital partnership are free to terminate it in the sense of bringing the relationship with its co-operation and common goals as a couple to end, and to obtain a divorce under the terms of the MCA, is in my judgment important.

90. This is because it points to a conclusion that by reference to the rationale or heading of compensation or sharing the lower income earner is not, and should not, be entitled to long term economic parity.

91. Further in my view this conclusion is supported by a number of passages in the speech of Baroness Hale, including the passages already highlighted from paragraphs 144 and 154 and:

"133. ---- Independent finances and self-sufficiency are the aims. Nevertheless, section 25A does not tell us what the outcome of the exercise required by section 25 should be. It is mainly directed at how that outcome should be put into effect. ----

137. ----- The cardinal feature is that each is looking at factors which are linked to the parties' relationship, either causally or temporally, and not to extrinsic, unrelated factors, such as a disability arising after the marriage has ended.

144. The ultimate objective is to give each party an equal start on the road to independent living. --------------------

147. Nevertheless, such debates are evidence of unease at the fairness of dividing equally great wealth which has either been brought into the marriage or generated by the business efforts and acumen of one party. It is principally in this context that there is also a perception that the size of the non-business partner's share should be linked to the length of the marriage: see, eg, Eekelaar, "Asset Distribution on Divorce - the Durational Element" (2001) 117 LQR 552; and "Asset Distribution on Divorce - Time and Property" [2003] Fam Law 828; and GW v RW (Financial Provision: Departure from Equality) [2003] 2 FLR 108.
148. The strength of these perceptions is such that it could be unwise for the law to ignore them completely. ----

154. ---- In McFarlane, there has been an equal division of property, but this largely consisted of homes which can be characterised as family assets. This was not enough to provide for needs or compensate for disadvantage. The main family asset is the husband's very substantial earning power, generated over a lengthy marriage in which the couple deliberately chose that the wife should devote herself to home and family and the husband to work and career. The wife is undoubtedly entitled to generous income provision for herself and for the sake of their children, including sums which will enable her to provide for her own old age and insure the husband's life. She is also entitled to a share in the very large surplus, on the principles both of sharing the fruits of the matrimonial partnership and of compensation for the comparable position which she might have been in had she not compromised her own career for the sake of them all. ----

157. ---- The judge quantified her claim without reference to the unfathomable value of the New Star shares acquired during the marriage, but in such a way as to give her a permanent income upon which she could live in the former matrimonial home albeit at a lower standard than she had been accustomed to during the marriage.

158. ---- That is undoubtedly more than she would need to get herself back to where she would have been had the marriage not taken place. But that has never been the express objective of the law, even in the 1970s and 1980s when the Court of Appeal supported such an approach in short childless marriages. Even without the former statutory objective, the court has to take some account of the standard of living enjoyed during the marriage: see section 25(2)(c). The provision should enable a gentle transition from that standard to the standard that she could expect as a self-sufficient woman. ----"

92. I accept that some of those remarks relate to the short Miller marriage and that this should be remembered when considering longer marriages. But it seems to me that when that is done these passage support the view that in taking into account the point that an element of the husband's earning capacity (the enhanced income or earning capacity) is a fruit or product of the marital partnership the following points have weight, namely (a) the point that a husband's level of earnings and his earning capacity are mainly based on the talents and energy of the husband, and (b) the point that throughout its life the marital partnership is based on voluntary co-operation and each party to it is free to bring it to an end with the result that neither can have a legitimate expectation that the roles of the other will continue so as to enable them to enjoy their respective products as if the marriage had not broken down.

Non discrimination and a wife's contributions in looking after the home and family
93. In this context counsel for the wife adopted and praised the arguments advanced in the House of Lords by counsel for Mrs McFarlane as reported in [2006] 2 AC at 626/7. That argument includes the following:

"The wider principles which should be applied in the wife's case are that looking after children is a substantial contribution to a marriage but it is also economically disadvantaged (sic), especially if a career has been sacrificed. That economic disadvantage gives rise to an entitlement to compensation ---------

-------------- A wife who continues to care for the children after the breakdown of a marriage has a continuing entitlement to a share of the future wealth of the bread-winning husband because that constitutes recognition that an ex-husband's earning capacity is a resource to which the ex-wife may have contributed; an ex-wife may be making an ongoing contribution by looking after the children after separation; an ex-wife may have been economically disadvantaged by her domestic contributions; an ex-wife may have sacrificed a successful; career during the marriage. The principles on entitlement and compensation can co-exist. In the context of giving up a career compensation is the more appropriate approach. It is important that ex-wives should not be regarded as supplicants merely because their contribution has been domestic rather than financial, for that would be to reintroduce the very discrimination which White v White [2001] 1 AC 596 sought to remove".

94. There is nothing in those arguments with which I would disagree. Indeed as appears earlier I agree that compensation and entitlement can co-exist and I am of the view that when a wife has not sacrificed a career as in McFarlane her financial disadvantage may not be most appropriately dealt with, but could be dealt with, under the heading or rationale of compensation so long as there is no double counting.

95. What this argument advanced by counsel for Mrs McFarlane does not include is an assertion as to how in general terms the domestic contribution should be taken into account so as to avoid the discrimination removed by White.

96. In this context it seems to me important to remember that a non-discriminatory, equal and fair approach is two-sided and an approach that has to be assessed and applied against the background and nature of a marital partnership. Therefore it seems to me important to ensure that the pendulum does not swing too far from:

i) a discriminatory and unfair award based on "reasonable requirements" and a Duxbury capital sum giving the ex-wife enough to meet those requirements until the date of her death assessed on an actuarial basis and nothing more, to
ii) an award that is unfair and discriminates against the party that has made the main direct financial contribution because it fails to recognise that:

(a) the marital partnership is terminable at any time and there is not a legitimate expectation of long term economic parity by reference to what the position of the lower earner would have been if the marriage had not broken down,
(b) the nature and effect of the factors that have gone to make up the earnings and earning capacity of the main earner,
(c) the aim is self-sufficiency and to give each party an equal start (my emphasis) on the road to independent living (see Baroness Hale at paragraph 144) having regard to their own talents and attributes, and their obligations and economic disadvantages flowing from the marriage (e.g. the wife continuing to be the primary caretaker of the children),
(d) in general the assumption is that the marital partnership does not stay alive for the purpose of sharing future resources unless that is justified by needs or compensation and that if a capital division is enough to provide for need and compensation then there should be no further financial provision (see Baroness Hale paragraphs 144 and 154), and
(e) the provision awarded should enable a gentle transition for the party who made the domestic contribution from the standard of living enjoyed during the marriage to the standard that she could expect as a self-sufficient woman (see Baroness Hale at paragraph 158, in the context of the Miller case) and in my view the length of the marriage and the role of an ex-wife as the primary caretaker of the children of the marriage would be factors to be taken into account in determining the amount of the provision to meet that transition.

97. In my view, the points in sub paragraphs 96 (ii)(d) and (e) indicate that the equality of the start referred to in sub-paragraph (c) is generally to be assessed at the time when the road to independent living starts and thus when the joint venture and participation of the parties as equal partners in the marital partnership ends.

98. It seems to me that the approach taken by the wife in this case is one that seeks to swing, or has the effect of swinging, the pendulum too far in favour of a wife who has made a full domestic contribution and has thereby assisted and promoted the economic success of a husband.

99. Naturally the striking of a fair balance involves issues of degree and evaluation. The wife recognises this by capping her claim in respect of future earnings and thereby recognising that if, as is expected, the husband continues to earn at at least the present level, in a few years his capital wealth will on the award she seeks pass that of the wife and will continue to grow much faster. That cap is an acknowledged and inevitable value judgment and it is put by the wife at £1.5million, on the basis of there first being an equal share of the 2006 and 2007 bonuses.

100. It was accepted, in my view correctly, by counsel for the wife that a later dividing line for the ascertainment of the matrimonial property by reference for example to a later trial date, her continuing role as the primary caretaker of the children, or the establishment of a longer period for the linkage of the bonuses to the marital partnership because of its length, was not open to the wife. Thus her primary argument was one that sought to apply the yardstick of equality as an effective entitlement to half of the largest possible sum.

101. If that sharing rationale was to produce a lower figure the wife sought a higher compensation figure. As appears earlier I accept that it would be wrong to assert that an award for the "run off" or transition to independent living should be isolated from the part of the award based on a division of the matrimonial property because to do so would be to fail to take an overview by reference to the elements of the guidance given by the House of Lords.

Disparity
102. Disparity of financial position after the end of the marriage by reason of the larger, or much larger, earning capacity of one party (generally still the husband) is mentioned in a number of places and contexts in the speeches in the House of Lords (see for example paragraphs 39, and 142/3).

103. Whether classified as a family asset or as future income or as a powerful resource, it is clear that a husband's future income is an asset that often falls to be utilised in achieving a fair result. This can be through periodical payments (not restricted to needs), in funding the borrowing for a lump sum on a clean break, or as the reason for an unequal distribution of capital on the basis that the disparity will be made up. There are other examples that could be given and which could be based on one or more of the concepts of needs, compensation or sharing.

104. The wife advanced the following propositions by reference to the foreign cases but it was submitted and I agree that they accord with the guidance given by the House of Lords, namely:

1.1. An earning capacity developed and nurtured during a marital relationship is a thing of value which falls to be fairly or equitably shared at the end of the relationship.
1.2. A non-working party can validly claim by virtue of her domestic contributions to have contributed substantially to the creation and development of this earning capacity.
1.3. The sharing can be effected by means of augmenting the capital award or by means of a direct spousal periodical payments award.
1.4. In determining the extent of the sharing the court must not be falsely confined by "needs", "reasonable requirements" or "marital standard of living".
1.5. Rather the court should recognise that marriage is an "economic partnership" or "an economic unit which generates financial benefits" or "a joint endeavour" where the "partners should expect and are entitled to share [its] financial benefits."
1.6. In determining the extent of the sharing the court should have regard primarily to principles of compensation and in particular should have regard to the sacrifices and economic disadvantages suffered by the non-working spouse. The principle of non-discrimination requires this. This process "seeks to recognise and account for both the economic disadvantages incurred by the spouse who makes such sacrifices and the economic advantages conferred upon the other spouse".
1.7 Furthermore, "great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party".

105. As with the argument advanced by counsel for Mrs McFarlane in the House of Lords, and adopted by the wife in this case, these submissions do not address how in the given case the fair and equitable award in respect of the husband's future income and earning capacity is to be evaluated. In my judgment this is fact sensitive. In many cases it will be relatively easy to do by reference to needs and/or compensation (the latter being, in my view correctly, the rationale primarily relied on by the wife in this case).

106. In some cases, and this is one of them, this exercise is much more difficult. It was recognised by both sides that this was so and that the exercise gives rise to value judgments. For example the wife accepts that the award should not be based on a lifetime entitlement to a share in the husband's income. This, and indeed generally the exercise itself, introduces a value judgment which cannot be based on any general formula.

The rationale relating to an award in respect of future income in a case such as this
107. When, as here, a share of future income or earning capacity cannot be justified by:

(i) needs (generously applied),
(ii) compensation (in the sense of an award to meet the disadvantages and losses to the wife in earning an income arising from the choices made during the marriage whether that be the loss of a high earning career or difficulties in entering the job market, because of absence from it and / or the continuing care of children), or
(iii) by the sharing of the existing and marketable capital assets built up during the marital partnership as the product of the husband's earnings or work and the lifestyle of the parties,
the question arises: What is the rationale for an award in respect of the husband's future earnings?

108. This question lies at the heart of this case.

109. To my mind the answer is not that a wife should receive a payment for her continued care of the children and thus an award for the performance of that role akin to a payment for services. In my view that aspect of an award is covered by needs or compensation in the sense set out in paragraph 107 (ii) above.

110. In my view key factors in answering the general question as to the rationale for making an award in respect of future income that will as time passes create a disparity between the earning husband and the non-earning wife are the issues relating to enhanced income, legitimate expectation, non-discrimination, disparity and the underlying aim discussed earlier.

111. To my mind it is in particular the concept of an award in respect of the loss of a share in the enhanced or greater income or earning capacity created by the contributions, lifestyle and spadework of the parties during the marital partnership, and thus an award in respect of that fruit or product of the joint endeavours of the parties during the marital partnership, that provides the answer to the general question. In my view that rationale could be classified as either compensation or sharing.

112. In my view the quantification of any such additional award is fact sensitive and difficult to describe in general terms or by reference to a formula.

113. Where, as here, an award is offered, or can be made, on a clean break basis that provides the wife with capital that will meet:

(i) her entitlement based on needs, and
(ii) all other aspects of compensation and sharing as described in paragraph 107 (ii) and (iii) above, in that it enables her to live at a standard at least comparable to that enjoyed in the later years of the marriage and to make substantial savings,

in my view the focus should be on the added effects of the provision to address the "run off" from the marital partnership, and thus the transition to independent living, considered in the context of the overall award.

114. It is therefore in large measure part of the overview of fairness by reference to the reasoning process adopted. Factors to be taken into account will include the length of time that the wife has enjoyed the fruits of the spadework and joint endeavours of the parties, the likely future product of that spadework and endeavour, an evaluation of the effects of the respective past and future contributions of the parties on the ability of the husband to earn his future income and thus on his earning capacity in the future (as opposed to an assessment of the effects of their contributions during the continuation of the marital partnership) and the overall effects of an award with and without a provision in respect of future income.

Conclusions in this case based on the above
115. The main family assets of this marriage were the husband's very substantial earning power and the properties and investments acquired as part of, and by the expenditure of, his income. His earning power increased during the marriage, very considerable financial benefits were derived from it and in, and by, the later years of the marriage it and the lifestyle of the parties had produced substantial capital assets.

116. In my view, the concept of the matrimonial property to which the yardstick of equality applies readily and with force is based on the concept of an equal and voluntary partnership providing mutual emotional, economic and general support and matching contributions to it of different kinds. A point, or line, for defining the matrimonial property is therefore a date when that mutual support ends see, for example, paragraph 174 of the speech of Lord Mance where he says:

"To the extent that the focus is on the matrimonial acquest, the period during which the parties were making their different mutual contributions to the marriage has obvious relevance. -------------- it seems to me therefore natural in this case to look at the period until separation."

117. This mutual support could have diminished, or ended, before the parties split up but the guidance given as to the effect of conduct by the House of Lords means that in this case the first possible point, or line, to identify the matrimonial property is early January 2005 (the husband having announced dissatisfaction with the marriage on 24 December 2004 and having left the matrimonial home on 9 January 2005). That coincides with the bonus year. Correctly no earlier date was argued for.

118. Therefore there is common ground that the assets of the parties at that time (1 January 2005) were matrimonial property and that the yardstick of equality applies to them readily and with force.

119. From that time it is in my view impossible to say on the facts of this case that the mutual co-operation and support of the parties in the roles they had chosen in their marriage continued as it had done during earlier happy years of the marriage. Indeed it was clear from their evidence that both of the parties suffered emotional turmoil and distress. I accept the husband's evidence that he became depressed and that the turning point from this was around August 2005. I do not mention this to indicate, or infer, that the wife suffered less. I mention it to confirm that far from lending support to their respective roles relating to the marriage, at work and at home, the relationship between husband and wife from January 2005 was causing emotional problems and distress to them both and was not promoting or assisting their performance of their respective roles. The fact that they both succeeded in performing their roles (one at work and one at home) is to their credit; but they achieved this without a continuation of the mutual support that had existed during the happy years of the marriage.

120. In my judgment it cannot be said that the unsuccessful attempts to reconcile, or the discussions about reconciliation, that took place continued the mutual co-operation, support and goal that had existed during the happy years of the marriage beyond the date when the husband left the matrimonial home. Indeed in my judgment a conclusion that they did would fly in the face of the reactions of these parties to and after that event, and indeed of normal human nature.

121. Thus in my view the sad reality was that in January 2005 the underlying foundation of the marital partnership was brought to an end and was not re-established.

122. The marriage however continued as did the husband's financial support for the wife and the children, and the wife's role as primary caretaker of the children. But this will continue after the decree absolute and the award of ancillary relief. Therefore it does not seem to me to provide, of itself, a guide to a later date being taken for the definition of the end of the marital partnership as the producer of the matrimonial property and thus for defining the matrimonial property.

123. The wife sought to include the 2006 and 2007 bonuses as part of the matrimonial property on the basis, as I understood it, that either:

(A) the attempts at reconciliation brought earnings for the company year 2005 into it and that the earnings for 2006 were brought in by an application of the arbitrary approach in Rossi, and thus a proximity argument, or
(B) both years were brought in because the hearing took place in early 2007 (although it was accepted that if the hearing had been set by the court at a later date the cut off point would still have been the earning year 2006 and thus the 2007 bonus).

124. As I hope is apparent from my earlier reasoning I reject those arguments. As to (A) I have rejected (i) the argument that the date of separation should be extended to a date in the latter part of 2005 because of the attempts at reconciliation, and (ii) the arbitrary approach taken in Rossi to include the whole of the working year 2006. I add that in my judgment on the facts of this case the application of that arbitrary approach creates a result that does not reflect the reality of the relationship between the parties. As to (B), in my view without (A) it has no free-standing force because it is linked to a date that is out of the control of the parties.

125. Thus in my view, the wife is seeking to stretch the concept and identification of the matrimonial property of this marriage, to which the yardstick of equality applies readily and with force, beyond its breaking point.

126. In my judgment the correct application of the guidance given by the House of Lords, and thus the correct process of reasoning, in this case is to:

(i) start with the common ground, namely that the assets of the parties as at 1 January 2005 were matrimonial property to which the yardstick of equality applies readily and with such force that (subject to adjustment in an overview) they should be equally divided,
(ii) accept and acknowledge that the relevance of the argument over the identification of the matrimonial property and thus its extension beyond January 2005 relates to the application of the yardstick and that its application is flexible,
(iii) reject, or abandon consideration of, the arguments that whether by reason of proximity or otherwise the matrimonial property can be increased to include further bonuses, and proceed on the basis that the matrimonial property to which the yardstick of equality applies readily and with force comprises the assets of the parties as at 1 January 2005, and
(iv) consider the award that should be made in respect of further bonuses, including the wife's loss of a share in the husband's future income and the product of his enhanced or greater income and earning capacity to which she contributed, against that background.

127. Although the House of Lords were considering the concept of matrimonial property in a different context, in my view that approach accords with the approach of the majority of the House of Lords on the identification of the matrimonial property because it proceeds from obvious common ground and does not seek to overstretch the concept by reference to arbitrary tests or dates that are difficult to define, (and which arguably lead to a rigid application of the yardstick). Further in my view by putting the more difficult value judgments firmly in the discretionary exercise that approach recognises and applies the flexibility of the statutory test and the guideline. It also accords with the common ground in McFarlane.

128. I acknowledge that the same result might be achieved if the approach adopted was one which included the 2006 and 2007 bonuses within the matrimonial property but accepted that the yardstick of equality did not apply to them readily or with force. However in my judgment that is not the correct approach in this case for the reasons given in paragraphs 119 to 125 hereof.

129. My starting point in the reasoning is therefore that the wife should receive one half of the matrimonial property (i.e. the assets of the parties as at January 2005). I stress that that is only a starting point and thus a stepping stone in the reasoning and might have to be revisited on an overview in which of course the principles of fairness, equality and non-discrimination have to considered and the award made by applying the rationale of needs, compensation and sharing.

130. In my view it is impossible to gauge, or value, the amount of the husband's future income that represents his enhanced or greater earning capacity and is thus a fruit or product of the marital partnership and the equal contribution made to it by the wife. It is of course speculation whether the husband would have been so successful if the wife had not given his career her full support by, for example, going to Japan, or by not giving up her work and career as a teacher. However a "but for test" indicates that the wife did not make it possible for the husband to concentrate on his career (save possibly in the early years by her agreement to go to Japan) and the enhancement of his earning capacity and income by her domestic contribution must be small in economic terms. In my view the reality is that his high level of income is primarily based on his talents, hard work and good fortune in pursuing his career.

131. The small part of his future income that can be said to flow from, or be, a fruit or product of the marital partnership (his enhanced income and earning capacity) is something that will continue for many years. It is however correctly common ground that the award in respect of future income should be assessed now as part of a clean break and thus that any award should be capitalised.

132. Albeit after the inclusion of the 2006 and 2007 bonuses in the matrimonial property, the wife quantifies this element of the award she claims at £1.5 million. The husband quantifies it as one half of the 2006 bonus (which is equivalent to the 2007 bonus) and therefore excluding its cash elements and at present values at approximately £1.19 million.

133. In my judgment, the best way to assess the overall fairness of the award in this case is to consider the overall financial effects of any proposed award. However before doing this an approach by reference to a share of future income should be carried out.

134. The wife has over the latter years of the marriage enjoyed the fruits of the husband's economic success and this is reflected in the substantial savings and capital assets making up the matrimonial property assessed at 1 January 2005. But in my view if the husband had advanced arguments that the wife should receive no more than a half share of those assets those arguments would have failed even though it could have been said with force, and I accept and assume, that an award of half of the matrimonial property as at 1 January 2005 (a) would enable the wife to live the rest of her life in great comfort, without any financial worries and to build up substantial savings, and (b) would meet the rationale for an award based on the factors set out in paragraph 107 above (i.e. the wife's needs, and the rationales of contribution and sharing (as defined therein)). Such arguments would have failed because, in my view, the principles of fairness, equality and non-discrimination require that the wife receives an additional award to reflect her contribution over the years of the marital partnership that has resulted in the husband's enhanced or greater earning capacity (and is a fruit or product of the marital partnership).

135. So, as I have explained, in my view the focus in respect of the assessment of the part of the award over and above the starting point of one half of the matrimonial property assessed as at 1 January 2005 should be by reference to concept of the "run off" or transition to the independent living which, because of the size of the husband's income, will create a disparity of economic positions. But that disparity will occur in circumstances when the marital partnership and the marriage is over and the relationship between the parties and between them and their children has changed from one based on one household to one based on two households. It will thus relate to a period during which the mutual co-operation at the heart of the marital partnership, which founds the wife's entitlement to one half of the matrimonial property as at 1 January 2005, is over.

136. But in my view the length of the marital partnership and the contribution of the wife in this case to it, the size of the husband's present and expected income over the next few years and the increase in his income over the later years of the marital partnership mean that the wife's incalculable, but in purely economic terms small, contribution to the husband's enhanced or greater earning capacity (and thus to part of his income for a number of years to come) founds an award that eases her transition to independent living. Without a cross-check against the figures in my view a "run off" award for this purpose of a sum equivalent to the total of one third of the income earned in 2005, one sixth of the income earned in 2006 and one twelfth of the income earned in 2007 would be fair.

137. This reflects and recognises that in the context of "run off" and transition that there is force in a proximity point (which at least in part underlies the argument in Rossi and thus the wife's argument to include the 2006 and 2007 bonuses in the matrimonial property) by including decreasing fractions of the income earned in 2005 (the 2006 bonus) and thereafter, all of which in my view exceed the fraction of that income that can be attributed to a fruit or product of the matrimonial partnership and thus the matrimonial property.

138. It also reflects and recognises (a) the point that what is being awarded is a capitalised sum to ease a transition, and (b) the point that the combination of these two points warrants an award based on a share of income over these three years that does not equate to the share of that income that can in purely economic terms be said to derive from the enhanced earning capacity and income share of the husband that is a fruit of the marital partnership, and (c) the point that it is an add-on to an award based on a half share of the assets representing the mutual contributions assessed in a non-discriminatory way of the marital partnership.

139. In my view it is impossible to assess this additional element of the award by reference to a formula but subject to a cross-check on the figures I have concluded that it is a fair, and perhaps a generous, approach that recognises the length of the marriage, the contribution of the wife, the nature of the award and the rationale for it by awarding a capital sum by reference to the income earned during the three years following the end of the marital partnership.

140. I now turn to the cross-check on the figures. The 2006 and 2007 bonuses are of similar amounts, and whether the prediction in evidence that the 2008 bonus is likely to be equivalent turns out to be correct or not, in my view, it is sensible and fair to take those years to cross-check. Taking the figures in paragraph 20, the range of such an award would be between in round figures £1.37 million and £1.39 million. This is between the "run off" figures advanced by the parties.

141. In my view a "run off" or transition award of £1.4 million payable now, and thus with no delayed elements is the fair add-on provision to an award of one half of the matrimonial property as at 1 January 2005 in the manner agreed between the parties, which as I understand it includes a 50/50 pension sharing order and provision in respect of any remaining deferred elements of the bonus for the working year 2004.

142. Such an award is slightly more than the husband's open offer. It therefore has the economic effects referred to earlier. In my judgment those effects demonstrate that it achieves an overall result that is fair. Further in my view the process of reasoning used to reach that result applies the principles of equality and non-discrimination and the rationale and guidance given by the House of Lords.

143. That assessment of the award and therefore the cross-check or overview on the figures is based on current share prices and does not disentangle cash elements for the working years up to the end of 2005. In my view correctly neither side argued that there should be any adjustments to take account of, for example, changes in value of the assets as at 1 January 2005 or the interim financial support provided by the husband since January 2005. In my view, and although parts of my reasoning (a) relate to assets as at 1 January 2005 and to bonuses already paid and deferred elements of bonus, and (b) do not precisely follow the reasoning of either side, I too consider that it would not be appropriate to make any adjustment for interim financial support and that the approach based on current share prices covers changes (increases/decreases) in the values of the assets as at 1 January 2005 and the elements of the bonuses that have been received and which are deferred.

144. In reaching that conclusion I have not forgotten that (a) the income to meet the wife's needs and other entitlements taken into account in the assessment of the financial effects of the award is less than half the net income of the marital partnership in recent years, and (b) the husband's continued earnings will quickly create an economic disparity between him and the wife. In my view such points do not warrant a higher award because:

(i) the income taken into account in the assessment generously covers the wife's needs and reflects the level of expenditure of the parties and their standard of living which has enabled them to build their capital assets which are to be equally shared as the product of the marital partnership and thus as relationship generated assets, and
(ii) in my view the guidance of the House of Lords demonstrates that the wife in her independent life is not entitled to an income equivalent to half of the husband's income during the latter years of the marriage. For example, as Baroness Hale says at paragraph 144 the aim is to give the parties an equal start on the road to independent living and, in general, the marital partnership does not stay alive for the purpose of sharing future resources unless that is justified by need or compensation.

The children
145. The rival contentions are that the wife says that the husband should pay £25,000 per annum for each child and the husband offers £18,000 per annum for each child and that he will also pay their mobile phone bills and pocket money directly. Both proposals are on the basis that the father pays the school and university bills which include a substantial element of "board and lodging". The husband also points out that he sees the children regularly (although not as often as he would like) and buys them things which form part of the wife's overall budget for them.

146. The wife's budget is £180,570 including school fees for all four children. After deducting the items that the husband proposes to pay directly (school and university fees, mobile phones and pocket money) the total is £87,240 (approximately £22,000 each per annum). In my judgment correctly I was not asked to make a detailed analysis of the budget put forward by the wife for the children but a general and broad brush consideration of it shows that it includes a number of items that are very high, in the context of the husband's income and the lifestyle of the family. For example: (a) £25,800 per annum on clothing and accessories (i.e. £6,450 p.a. for each child) as to which I accept the husband's contention that it is far in excess of the amount spent historically, (b) £32,000 per annum for holidays is also high, and again I accept the husband's contention that it is out of line with the kind of holidays that the family has enjoyed historically and his point that the children will inevitably go on holiday with him from time to time, and (c) £2,000 for "museums, exhibitions and fairs" is a surprising figure.

147. In my judgment the husband's offer of £18,000 per annum for each child (a total of £72,000) is one that meets a generous budget for the children (excluding school and university fees) having regard to the husband's earnings, the fact that he has earned his money by pursuing his career and hard work and the lifestyle and approach to life of the family during the marriage. That approach has clearly been one that placed weight on self-sufficiency and education. In my view the claim advanced by the wife for the children is over generous to them and does not reflect this lifestyle. I have concluded that the husband's offer is clearly sufficient, and that it is fair and reasonable.

148. I add that in my judgment if either parent wishes to spend extra on all or any of the children more generally, or as one-offs, financially they will both be in a position to do so. Further in my view any such decision to be generous to one or more of the children is a decision for each parent to take from time to time as a parent and not something I should impose on the husband by making a higher award for the children.